Washington announced last month it would begin enforcing a controversial provision of the 1996 Helms-Burton Act allowing Cuban-Americans to sue in US courts over property confiscated by Cuba as it seeks to increase pressure on Havana.
Before Trump, every US president had waived enforcement of the Title III provision of Helms-Burton, in part to avoid conflicts with Washington's allies.
The European Union is the biggest foreign investor in the communist island — with Spain leading the way — and the decision is expected to harm overseas investments.
“This is further proof of a lack of cooperation on the part of the US administration and the adoption of extra-territorial measures which, according to us, are an abuse of power which we oppose,” Foreign Minister Josep Borrell said during an interview with Spanish public television TVE.
“This is going to open a legal battle, we will go to the WTO (World Trade Organization),” he added.
Borrell also accused President Donald Trump's administration of acting like “a cowboy” for its implicit threat of military intervention in Venezuela.
Washington has repeatedly warned that “all options” were on the table regarding its efforts to remove Venezuelan President Nicolas Maduro from power.
Spain has backed the formation of a contact group composed of EU and some Latin American governments to seek Maduro's agreement on holding new elections in the former Spanish colony.
“The contact group which we are part of is not on the same wavelength as the US administration, which is like a cowboy who says 'look at me, I will draw my gun',” Borrell said.
“We don't want someone who draws their weapon. On the contrary, we call for a peaceful, negotiated and democratic solution,” he added.
Spain and the United States are among the more than 50 nations which have formally recognised opposition leader Juan Guaido as the country's interim president.
They have declared Maduro's leadership “illegitimate” since he secured a second six-year term in elections last May widely criticised as tainted.